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Silver Price Technical Analysis: Keep an Eye on Channel Support, Gold

Silver Price Technical Analysis: Keep an Eye on Channel Support, Gold

What’s inside:

  • Silver prices are still pointed higher as long as it can maintain the bullish channel off the July low
  • The 200-day, upper parallel are resistance for now
  • Gold firmly above the 2011 trend-line, 1296 next big hurdle

Find out in the Q3 Forecast what’s driving Gold & Silver this quarter.

Silver prices have been working their way higher in bullish fashion since the spike-day low created back on 7/10. The past few days the rally stalled on a failure to maintain above the 200-day MA and after touching off on the upper parallel of the channel since in place since July. The trend in the intermediate to long-term remains down, marked by the lower highs and lower lows, however; as long as the lower parallel maintains then keeping a tentatively bullish stance in the near-term makes sense.

Looking higher, if silver keeps the channel intact and can break above last week’s high at 17.24 (also >200-day), then look for the July 2016 trend-line to come into play as the next level of resistance. Ideally, if the broader trend is to turn higher we see gold not only clear above 1296 but also see silver catch a bid above the July trend-line as well. A clean break below the lower parallel doesn’t necessarily turn the picture bearish, but will make the situation more tenuous for longs, with 16.09 becoming an important low to stay above.

Silver: Daily

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Gold clearly closed above the 2011 trend-line on the weekly time-frame, an event which helps put the precious metal in position to rally. But for it to have full clearance a break above the 1296 double-top will need to take shape. Keep an eye on this development should it happen, because while silver might not find the same kind of sponsorship it will go along for the ride should gold start to gain momentum. In the event gold fails to hold above the long-term threshold, given silver has been the weaker of the two, it is more likely to lead to the downside.

Gold: Weekly

Heads up: A potentially market-moving event comes up tomorrow at 14:00 GMT when the July FOMC meeting minutes will be released. It may be a non-event, but we’ve seen the minutes in the past have a material impact on short-term price action so traders will want to be on their toes.

---Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at @PaulRobinonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.